# Differential Analysis for a Discontinued Product A condensed income statement by product line for Healthy Beverage...

###### Question:

Differential Analysis for a Discontinued Product

A condensed income statement by product line for Healthy Beverage Inc. indicated the following for Fruit Cola for the past year:

 Sales $236,000 Cost of goods sold 108,000 Gross profit$128,000 Operating expenses 146,000 Loss from operations $(18,000) It is estimated that 15% of the cost of goods sold represents fixed factory overhead costs and that 23% of the operating expenses are fixed. Because Fruit Cola is only one of many products, the fixed costs will not be materially affected if the product is discontinued. a. Prepare a differential analysis dated January 5 to determine whether Fruit Cola should be continued (Alternative 1) or discontinued (Alternative 2). If an amount is zero, enter "0". Use a minus sign to indicate a loss.  Differential Analysis Continue Fruit Cola (Alt. 1) or Discontinue Fruit Cola (Alt. 2) January 5 Continue Fruit Cola (Alternative 1) Discontinue Fruit Cola (Alternative 2) Differential Effect on Income (Alternative 2) Revenues$  Costs: Variable cost of goods sold Variable operating expenses Fixed costs Income (Loss)  $b. Should Fruit Cola be retained? ## Answers #### Similar Solved Questions 1 answer ##### Sum of Numbers Problem: Write a method that accepts an integer argument and returns the sum... Sum of Numbers Problem: Write a method that accepts an integer argument and returns the sum of all the integers from 1 up to the number passed as an argument. For example, if 50 is passed as an argument, the method will return the sum of 1, 2, 3, 4, . . . 50. Use recursion to calculate the sum. Dem... 1 answer ##### Evaluate intcos^5x dx using u-substitution or tabular integration? Evaluate intcos^5x dx using u-substitution or tabular integration?... 1 answer ##### Exercise 187 The worksheet for Gibler Rental Company appears below. Using the adjustment data below.complete the... Exercise 187 The worksheet for Gibler Rental Company appears below. Using the adjustment data below.complete the worksheet Add any accounts that are necessary. Ad istment data: () Prepaid rent expired during August$). b) Depreciation expense on coulment for the month of August, $8. ( Supplies on ha... 1 answer ##### A manufacturer of colored candies states that 13% of the candies in a bag should be... A manufacturer of colored candies states that 13% of the candies in a bag should be brown, 4% yelow 13% rad, 24% blue, 20% orange, and 16% green. A student randomly selected a bag of colored candies. He counted the number of candies of each color and obtainad the results shown in the table. Tes: whe... 1 answer ##### 2. Which of the following is not a likely source of market failure? Asymmetric information Moral... 2. Which of the following is not a likely source of market failure? Asymmetric information Moral hazard Externalities Perfect competition 3. Which of the following categories most accurately describes the Social Security tax in the United States? Proportional Progressive Regressive Value-added tax 4... 1 answer ##### List signs and symptoms of worsening heart failure. List signs and symptoms of worsening heart failure.... 1 answer ##### A. You are the senior responsible for the audit of KKK Limited which has a 30... A. You are the senior responsible for the audit of KKK Limited which has a 30 June balance date. The company's inventory consists of approximately 20,000 music cassettes and compact discs, details of which are maintained on a perpetual IT inventory system. Inventory is counted on a cyclical basi... 1 answer ##### 14. Suppose Jack has an income of$12 to buy two goods: sandwiches and sodas. The...
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